Tuesday, June 14 — Lansing Mayor Virg Bernero told the City Council on Monday that the city needs to tap $1 million in reserves to cover an unanticipated shortfall in the current budget.

Bernero said expenses were higher than projected because of increased health care, pension and insurance costs, vacancy factors, Fire Department overtime and the unsuccessful May 3 special millage election, which cost $53,000.

The city’s reserves have gone from $12.96 million in fiscal year 2009 to $7.93 million at the beginning of this fiscal year, which ends June 30.

Randy Hannan, deputy chief of staff for Bernero, said after the meeting that the city’s use of reserves — while it never wants to do it — has been a trend over the last few years.

Bernero also took a few moments at Monday’s meeting to discuss his opinion on medical marijuana dispensaries. At-Large Councilwoman Carol Wood introduced an ordinance to regulate dispensaries that would eliminate the moratorium on new businesses. The Council scheduled a public hearing for Monday on the ordinance and is expected to vote on it at its June 27 meeting, she said.

The proposed ordinance limits new dispensaries to one commercial district (F-1, which includes the Michigan Avenue corridor from Larch Street to U.S. 127) and all industrial areas. The proposed ordinance would not allow businesses downtown. It also requires businesses to be at least 1,000 feet from each other and from schools, churches, childcare centers and rehabilitation facilities. However, any existing businesses not in these zones or that don’t comply with the buffering requirements would be grandfathered in.

Bernero referred to an ordinance he requested to be drafted by the City Attorney’s Office to make his views known on dispensaries. Bernero suggests allowing business in all areas except those zoned residential and for parking — which would include downtown — and that businesses should be allowed to be 500 feet or more from each other.

Bernero, in his message to Council Monday, said the “status quo is unacceptable” because some businesses are too close together. “None of us planned for or wanted this clustering in certain parts of the city. That is unacceptable to me.”

Bernero agreed with other aspects of the draft ordinance, including licensing businesses and requiring background checks on dispensary owners. While he said businesses should be allowed to be closer to each other, he agrees with the 1,000-foot distance requirement from schools, churches and child care facilities.

Bernero said he was opposed to the six-month moratorium, but agreed the needs “a more orderly system.”

In other business, the Council unanimously approved two brownfield redevelopment plans that seek to rehabilitate vacant, unused buildings in the city.

The first was for developer Scott Gillespie, who plans to transform the former Citgo gas station at 1621 E. Michigan Ave. on Lansing’s east side into a three-story, mixed-use retail and residential property. Gillespie plans to invest $1.3 million on the .13-acre site. The brownfield plan is for 20 years because it would take longer than usual to capture increased property taxes to reimburse Gillespie on the site cleanup, At-Large Councilman Brian Jeffries said.

A second brownfield was approved for Reutter Park Place at 301 E. Lenawee St. downtown to rehabilitate the former YMCA building into a residential unit. The plan calls for 228 “loft/residential” with an equal amount of parking spaces. Developers plan to spend $20 million on this project.

In other tax incentive business, the Council unanimously approved 24 Neighborhood Enterprise Zone certificates for properties in the East Village development. NEZs offer a 50 percent reduction of property taxes for 12 years. The credits are for homeowners and don’t take effect until someone buys the property. While the developer, Allen Edwin Homes, “hold on” to the credits, Jeffries said, the developer is not eligible to use them.

The Council unanimously approved an ordinance allowing for the sale and consumption of alcohol at Fenner Nature Center. At-Large Councilman Derrick Quinney said this ordinance is for special fundraising events and doesn’t allow the sale or consumption on park property without a permit to do so.

By resolution, the Council also approved:

A liquor license for Gone Wired Caf, 2021 E. Michigan Ave.

A public hearing on July 7 to consider a special land use permit for 1122 W. Holmes Road, Suite 3. Esteban Chavez seeks to use the property for a church in the Logan Shopping Center.

Appointing Pierre LaVoie to the Lansing Economic Development Corp./Tax Increment Finance Authority/Lansing Brownfield Redevelopment Authority Board of Directors for a term to expire Feb. 28, 2017.

Appointing Colleen Serkaian to the Michigan Avenue Corridor Improvement Authority for a term to expire June 30, 2014.

Reappointing Anthony Cox to the Planning Board for a term to expire June 30, 2015.

Appointing Rebecca Bahar-Cook to the Saginaw Avenue Corridor Improvement Authority for a term to expire June 30, 2013.

Appointing Joan Nelson to the Michigan Avenue Corridor Improvement Authority for a term to expire June 30, 2015.

Appointing former City Councilwoman Sandy Allen to the Historic District Commission for a term to expire June 30, 2012.

Appointing Jerome Marks to the Saginaw Street Corridor Improvement Authority for a term to expire June 30, 2013.

Appointing Catherine Groll to the Elected Officers Compensation Commission for a term to expire Oct. 1, 2018.

Appointing Nicole Proulx to the Downtown Lansing, Inc. Board of Directors for a term to expire June 30, 2012.

Appointing former City Councilman Tim Kaltenbach to the Lansing Entertainment and Public Facilities Authority Board of Directors for a term to expire June 30, 2014.

Reappointing Cynthia Ward to the Board of Water & Light Board of Commissioners for a term to expire June 30, 2015.

Reappointing Ifield Joseph to the Capital Area District Library Board of Directors for a term to expire April 15, 2015.

Reappointing Todd Cook to the Capital Region Airport Authorty for a term to expire Sept. 30, 2014.

Three separate licenses to sell fireworks. One is for Menards to sell fireworks at its store at 725 American Road and the other two are for American Promotional Events-TNT Fireworks to sell at various locations in the city.